On July 1, Tin Hau Company\'s Work in Process Inventory account showed a beginni

Question

On July 1, Tin Hau Company's Work in Process Inventory account showed a beginning balance of $9,000. The Materials Inventory account showed a beginning balance of $40,000. Production activity for July was as follows: (a) Direct materials costing $28,800 were requested for production; (b) total production-related payroll was SI 0,600, of which $2,600 was used to pay for indirect labor; (c) indirect materials costing $8,400 were purchased and used; and (d) overhead was applied at a rate of 120 percent of direct labor costs. Record Tin Hau's materials, labor, and overhead costs for July in T accounts Compute the ending balance in the Work in Process Inventory account. Assume a transfer of $45,000 to the Finished Goods Inventory account during the period

Explanation / Answer

Tin Hau Company A/c All Amounts in $ Work in Process Inventory A/c Materials A/c 01-Jul To Balance b/fd 9000 31-Jul By Finished Goods Inventory A/c 45000 01-Jul To Balance b/fd 40000 31-Jul By Work in Process Inventory A/c 28000 31-Jul To Materials A/c 28000 31-Jul By Balance c/fd 18000 31-Jul By Balance c/fd 12000 31-Jul To Direct Labor A/c 8000 31-Jul To Indirect Materials A/c 8400 31-Jul To Overheads A/c 9600 Labor A/c Indirect Labor A/c 31-Jul To Cash A/c 10600 31-Jul By Indirect Labor A/c 2600 31-Jul To Direct Labor A/c 2600 31-Jul By Balance c/fd 2600 31-Jul By Work in Process Inventory A/c 8000 Indirect Materials A/c Overheads A/c 31-Jul To Cash A/c 8400 31-Jul By Work in Process Inventory A/c 8400 31-Jul To Overheads Allocated A/c 9600 31-Jul By Work in Process Inventory A/c 9600

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